HBO Go's exclusivity will work to Netflix's gain

It's 2010, and HBO is getting with the digital revolution. This week the cable network started streaming its content online. With a tagline of “It’s HBO on your computer,” all of the network's series and films will now be available for streaming — to existing subscribers — at HBOGO.com.

HBO's premium content is the reason that more than a few consumers spring for cable. But the network isn't ready to bring their films and series directly to the public. They can always do that later, but it may be too late by then to make up the strides that Netflix has been making in online streaming.

HBO has made its reputation on original programming like Sex and the City, The Sopranos and Curb Your Enthusiasm. But the network also wins over subscribers with easy access to recently released films, something that Netflix also trades in. And Netflix's streaming strategy is finally starting to come to fruition.

Over the past few years, Netflix has been hard at work growing its partnerships to stream content online and on television
screens. Currently, Netflix is enabled to stream video through Roku, Sony Playstation and Xbox, as well as various DVD players and CE platforms. Soon, there will be even more ways to access Netflix content instantly.

According to new research from The Diffusion Group this week, nearly two thirds of Netflix subscribers are now doing exactly that.

And the company's bullish approach to streaming video should go a long way toward
helping the service avoid a Blockbuster style toppling later on. Netflix has been covering its bases so that whichever way video viewing habits move, the company can offer an easy viewing option. Currently, 1/3 of broadband enabled Netflix subscribers are watching video on their PCs, 8% on their TVs and 24% use both the PC and television.

Meanwhile, HBO is being handicapped by its preexisting relationships with cable companies. Only Verizon FiOS and cable subscribers have access to the online HBO product.

Nick Bilton at The New York Times says that he'd be willing to pay $15 to $20 a month to watch HBO online. And he surely isn't the only one. But right now, HBO isn't concerned with winning over new customers. Eric Kessler, president at HBO, tells The Times:

“We’re a subscription service, and our ongoing overarching objective is
to enhance the service to make it better. It’s
about enhancing the satisfaction and continuing the life cycle of the
subscriber.”

Moreover, it's about how HBO gets distributed to consumers. Currently, HBO is part of a package deal sold by the cable companies. Kessler continues:

“We have a relationship with the cable providers. They have 100 million
users, and they literally have tens of thousands of customer service
representatives on the phone selling HBO every single day. That is a tremendous benefit to us.”

While selling HBO directly to subscribers online could earn HBO quite a lot of new eyeballs (and revenue), it's not currently enough to counter the pain that cable companies could inflict on the network by cutting off their subscriber stream.

HBO Go establishes a way for HBO content to get online and a good looking platform to do so (as far as I can tell, I'm not an HBO subscriber). Once the company frees itself from the clutches of the cable companies a bit more, it will be able to open up its online platform to new subscribers. But by that time, Netflix could easily be the go to source for streaming online film and video. The only thing HBO will have left is its new, original content (Netflix already has their backlog).

That isn't a revenue stream to scoff at. But it's not all that HBO is. It's just all that HBO will likely be by the time HBO Go opens up online.

Comments (4)

Steven

In my opinion HBO Go will go nowhere fast. Not only is it hampered by a PC only access model and HBO only subscribers, but also it’s only offered by two providers Verizon FIOS and premium Comcast subscribers. I’m not and HBO subscriber and don’t intent to be any time soon. I get most of my content online and on my TV through my Roku box from NetFlix, Amazon VOD and other free providers. I access Hulu for free through my PlayOn media server running on my laptop. Due to Hulu’s current misguided policy of a PC only model, if you want to watch their content on a TV you’ll need a legal work around and PlayOn software provides the means to access Hulu and other PC only content providers and view it on your TV. It’s funny though, last year NetFlix emailed a survey to its existing customers and asked how much additional money we would be willing to pay for premium HBO streaming. It’s understandable that HBO’s hands are tied because of current contract restrictions with cable providers and that is why HBO GO is going nowhere.

I am really happy with HBO GO, as a subscribber to HBO not only does it allow me to go back to earlier seasons of content that I missed (and that is not always accessible via OnDemand via the cable provider) it also allows me access to new things they are rolling out like preview episodes. For example after tonights Game of Thrones on HBO you can go to HBO GO and watch next weeks episode a week early!! I'm just most interested in finding out if they will make it available via Sony/Roku etc as a channel that you can stream to your TV or if it will be left exclusively to your laptop and (where I watch it most) my iPhone.
I think it's a great add on and will draw some to subscribing as it gets you access from home and on the go- Looks awesome on iPad2 and in general HBO isn't all that expensive since the cable providers typically offer deals.

Anyway, way to GO- HBO GO and now I just want to be able to stream via my Roku or BD player!!

over 5 years ago

Chaknor

Hulu does have a TV service, it's called Hulu Plus and it's about he same price for netflix streaming, and it also is available via Roku. Plus, it's all HD!

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